Identifier
Created
Classification
Origin
09CANBERRA138
2009-02-11 07:28:00
SECRET//NOFORN
Embassy Canberra
Cable title:  

PRIME MINISTER REIGNS OVER FOREIGN AFFAIRS

Tags:  PREL PGOV AS 
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S E C R E T SECTION 01 OF 04 CANBERRA 000138 

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SIPDIS

E.O. 12958: DECL: 02/10/2024
TAGS: PREL PGOV AS
SUBJECT: PRIME MINISTER REIGNS OVER FOREIGN AFFAIRS

REF: A) CANBERRA 34 B) 08 CANBERRA 1230 C) 08
CANBERRA 1196

Classified By: CDA Daniel A. Clune for reasons 1.4 (b) and (d)

S E C R E T SECTION 01 OF 04 CANBERRA 000138

NOFORN
SIPDIS

E.O. 12958: DECL: 02/10/2024
TAGS: PREL PGOV AS
SUBJECT: PRIME MINISTER REIGNS OVER FOREIGN AFFAIRS

REF: A) CANBERRA 34 B) 08 CANBERRA 1230 C) 08
CANBERRA 1196

Classified By: CDA Daniel A. Clune for reasons 1.4 (b) and (d)


1. (S/NF) SUMMARY: Since becoming Prime Minister in December
2007, Kevin Rudd has appropriated control of foreign-policy
formulation and decision-making, leaving his Foreign Minister
to perform mundane, ceremonial duties and relegating the
Department of Foreign Affairs and Trade (DFAT) to a
backwater. This shift has been reinforced bureaucratically
by the creation of the Office of National Security Adviser in
the Department of Prime Minister and Cabinet (PM&C),though
PM&C as an institution is also playing a smaller role in
foreign policy decision-making because it is fully occupied
supporting Rudd's day-to-day demands. Foreign policy is now
run from the Prime Minister's Office, with its two full-time
foreign policy advisors. Key Australian Ambassadors,
including Dennis Richardson in Washington, are also playing a
larger role as they work more directly with the PM's Office.
Rudd, who likes to centralize decision-making in any event,
undoubtedly believes that with his intellect, his six years
as a diplomat in the 1980s and his five years as shadow
foreign minister, he has the background and the ability to
direct Australia's foreign policy. His performance so far,
however, demonstrates that he does not have the staff or the
experience to do the job properly. END SUMMARY

KEVIN 747


2. (C/NF) Most observers expected Kevin Rudd to play an
active role on foreign policy as Prime Minister. He was a
former diplomat who served as the Opposition Spokesperson for
Foreign Affairs and Trade for five years. In addition, his
foreign minister, Stephen Smith, a career Australian Labor
Party (ALP) politician, had no background in foreign affairs.
In his 14 months in power, however, Rudd has done more than
play an active role -- he has taken over the formulation and
conduct of foreign policy on all major issues. Major policy
initiatives, such as the proposals for an Asia-Pacific
Community and International Commission on Nuclear
Nonproliferation and Disarmament, were conceived and
announced by him without consultation or advance notice to
the foreign affairs bureaucracy. Since the Rudd Government

took office, Rudd has been to China twice; Smith has not
visited. Rudd traveled overseas so much during 2008 - more
often than not without FM Smith - that his new nickname in
the media is "Kevin 747" (a takeoff on his "Kevin 07"
campaign slogan and later, the "Kevin 24/7" moniker
reflecting his workaholic style).

DFAT BYPASSED


3. (C/NF) A senior foreign diplomat, quoted in the media last
October, noted that under the former Foreign Minister
Alexander Downer, it was important to know the FM's staff,
now the diplomat said, all one needed was Gary Quinlan's
(Rudd's foreign policy adviser) phone number. Other foreign
diplomats, in private conversations with us, have noted how
much DFAT seemed to be out of the loop. The Israeli
Ambassador told us that senior DFAT officials are frank in
asking him what PM Rudd is up to and admit that they are out
of the loop. DFAT morale has plummeted, according to our
Qof the loop. DFAT morale has plummeted, according to our
contacts inside as well as outside the Department. Downer's
former chief of staff, Chris Kenney, told poloffs recently
that FM Smith has been relegated to doing things that Downer
used to pass to his parliamentary secretaries.

THE FOREIGN MINISTER ON VACATION


4. (S/NF) Some view FM Stephen Smith, in particular, as being
partially responsible for his Department's decline.
Surprised by his appointment as Foreign Minister, Smith has
been very tentative in asserting himself within the
Government. DFAT contacts lamented that Smith took a very
legalistic approach to making decisions, demanding very
detailed and time-consuming analysis by the Department and
using the quest for more information to defer making
decisions. BHP Billiton VP for Government Relations Bernie
Delaney, a long-time friend of Smith's, told us that Smith
suffered from not having a strong chief of staff to force him
to prioritize and make decisions. Delaney recently told us

CANBERRA 00000138 002 OF 004


that he expects Smith's performance to improve now that he
has a permanent chief of staff, Frances Adamson, the former
Deputy High Commissioner in London and an experienced DFAT
official. David Pearl, a Treasury official who served
briefly as Smith's advisor in 2004, told us that Smith is
very smart, but intimidated both by the foreign policy issues
themselves and the knowledge that PM Rudd is following them
so closely. Former DFAT First Assistant Secretary for North
Asia Peter Baxter once lamented to us that Smith's desire to
avoid overruling DFAT recommendations meant that he often
delayed decisions to the point that the PM's Office stepped
in and took over.


5. (C/NF) After Israel initiated its Gaza operation on
December 27, Israeli Ambassador Yuval Rotem contacted FM
Smith at his home in Perth, Western Australia, to ask for
Australia's public support (ref A). Rotem told us that
Smith's response was that he was on vacation, and that the
Ambassador needed to contact Deputy Prime Minister Gillard,
who was acting prime minister and foreign minister at the
time. (NOTE: The Israel-Palestine issue is a very sensitive
one for the Rudd Government. An ALP senator told us that a
number of MPs had a meeting with Smith in December asking
that Australia be more supportive of Israel, and there are a
number of left-wing ALP politicians and unions who are strong
supporters of the Palestinians. End note.)

WHAT'S A DEMARCHE?


6. (S/NF) Last December, Smith called in the Ambassador to
register his and the Prime Minister's disapproval of the fact
that the United States had demarched Australia on the
negotiation of a SOFA with Iraq. Smith somewhat indignantly
told the Ambassador that allies should not have to demarche
each other on an issue such as this. The Embassy thought
that the GOA was upset because the lengthy negotiation of our
SOFA left very little time for Australia to conduct its own
negotiations. This was undoubtedly part of the motivation
for the meeting but later, at a meeting at DFAT, an Assistant
Secretary confided to the DCM that Smith did not fully
understand what a demarche was, and thought that it was only
used on special occasions to convey an official rebuke.

NATIONAL SECURITY ADVISER APPOINTED


7. (C/NF) On December 4, Rudd announced the appointment of
Duncan Lewis, a 30-year veteran of the Australian Defence
Force, to the newly-created position of National Security
Adviser (ref B). He is officially an Associate Secretary of
PM&C and will be responsible for advising the Prime Minister
on all policy matters relating to Australia's security.
Lewis will also chair a new National Intelligence
Coordinating Committee. The breadth of his duties is
illustrated by the fact that, when former Ambassador McCallum
met with Rudd November 20 to convey a request that Australia
accept some of the Chinese Uighers currently detained in
Guantanamo, Lewis and Quinlan were the only staff with Rudd
and Lewis conveyed Rudd's decision to the Embassy. He also
accompanied the Prime Minister to the scene of the recent
bushfires in Victoria and helped coordinate the federal
response.


8. (S/NF) Several DFAT officials have commented that despite
Q8. (S/NF) Several DFAT officials have commented that despite
Lewis' personal exposure to the PM, PM&C has not filled the
vacuum caused by DFAT's marginalization. One DFAT Assistant
Secretary told us that PM&C has much less of a role in
formulating policy than it did under the Howard Government,
when PM&C moved from a "policy coordination" role to a
"policy development" role by its final years. This DFAT
official stated that PM&C's comparatively small foreign
policy staff is overwhelmed supporting Rudd's foreign policy
activities, particularly his travel, which has reduced its
ability to push its own agenda. PM&C Coordinator for
Economic Affairs Gordon Debrouwer has indirectly confirmed
this on several occasions, telling us that PM&C foreign
policy staff have been run ragged answering the PM's queries
and supporting his interaction with foreign officials.
Senator Mark Arbib, a Labor heavyweight who is widely seen as
being a voice Rudd listens to, told us that he has been
surprised by the amount of reading material the PM demands
from PM&C to prepare for conversations with foreign leaders.
He said that Rudd's staff would like to get their boss to

CANBERRA 00000138 003 OF 004


spend less time on foreign policy and delegate more, but that
they recognize that this is a hopeless task.

LARGER ROLE FOR KEY AMBASSADORS


9. (S/NF) Several contacts tell us that DFAT and PM&C's
relative decline have been counterbalanced by a larger
(albeit informal) role for key Australian Ambassadors. In
particular, they note that Ambassador Richardson in
Washington has developed a strong personal relationship with
Rudd and that he works directly with Gary Quinlan, the former
DCM in Washington, to keep the PM informed as well as carry
out the PM's orders. Former DFAT First Assistant Secretary
for North Asia Peter Baxter told us that Australia's
Ambassador in Beijing, Geoff Raby, has also developed a
strong relationship with the PM's Office, as has his
counterpart in Indonesia. BHP Billiton's well-plugged-in VP
Bernie Delaney told us that Rudd's relationships with
Australian Ambassadors drive FM Smith to distraction, but
that he believes there is nothing he can do about it and
accepts not being fully in the loop as "inevitable."

FOREIGN POLICY ON THE RUN?


10. (C/NF) Rudd's governing style has been to centralize
decision-making in his office and rely on a small group of
advisers. Quinlan is an experienced DFAT veteran (who served
as DCM at the Australian Embassy in Washington from 2005-08).
He is assisted by Scott Dewar, another DFAT official who has
served in China, Korea and Japan, as well as having been
former FM Downer's speechwriter. However, Rudd's 29-year old
chief of staff is a domestic political operative and none of
his key ministerial advisers - Deputy PM Julia Gillard,
Treasurer Wayne Swan, and Finance Minister Lindsay Tanner -
have any foreign policy experience. Duncan Lewis is a
retired general, though with considerable experience dealing
with DFAT and the intelligence community. The PM's office
tends to respond to the media cycle and the next event on the
schedule and cannot focus on longer-term policy development.
PM&C, which is meant to provide the policy coordination, is
tied up responding to current events. As a result, according
to a senior government official who was quoted in the press,
the Rudd Government "is not getting well-thought-out policy
advice; it is all policy on the run, but neither the
ministers nor their advisers can tell the difference."


11. (S/NF) Policy on the run and the lack of consultation
within the Government may help explain what were considered
to be the foreign policy mistakes of Rudd's first 14 months
in office (ref C):

-- Foreign Minister Stephen Smith's announced in February,
without any prior consultation with its allies, and at a
joint press availability with visiting Chinese Foreign
Minister Yang Jiechi, that Australia would not support
possible quadrilateral discussions between Australia, the
United States, Japan and India.

-- The itinerary for Rudd's first overseas trip in March
2007 included the U.S., Europe and China but bypassed Japan.

-- Rudd's June speech announcing that he would push for the
creation of an "Asia-Pacific Community" was done without
advance consultation with either other countries or within
the Australian Government. Even the distinguished former
Qthe Australian Government. Even the distinguished former
diplomat Rudd chose to spearhead the effort was not told of
it until a few hours before the public announcement.

-- Rudd rolled out a proposal that Australia would set up an
international commission on nuclear nonproliferation and
disarmament in Hiroshima during a photo-op heavy trip to
Japan in June. His Japanese hosts were given insufficient
advance notice and refused a request for a joint
announcement. He did not consult in advance with any of the
P5 countries.

-- In September, the PM's Office asked for a meeting with
President Bush while Rudd was in the United States for the UN
General Assembly. After making an aggressive and ultimately
successful push for a meeting, the PM's Office abruptly
canceled the meeting two days later.


CANBERRA 00000138 004 OF 004


-- In October, Rudd's self-serving and inaccurate leaking of
details of a phone call between President Bush and him cast
further doubt on his foreign policy judgment.

-- In January, after the press published a story that the
U.S. had asked Australia to accept some Guantanamo
detainees, the Government responded to the story by issuing a
statement publicly acknowledging our confidential request and
stating that they were not likely to accept the detainees.

COMMENT: DECISION-MAKING WILL IMPROVE BUT REMAIN IN RUDD'S
HANDS


12. (S/NF) To some extent, the missteps of the Rudd
Government can be attributed to their inexperience. The ALP
had been out of power for almost 12 years and is still
learning how to run a Government. U.S. interlocutors have
noticed, for example, that FM Smith has grown in ability and
stature as he gains more confidence in his job. He has also
recently hired the former DCM at the Australian High
Commission in London as his chief of staff. On the other
hand, mistakes that have occurred because of a haphazard,
overly-secretive decision-making process are likely to
continue. Rudd is a centralizer by nature who will only
grudgingly share the decision-making on foreign policy. A
strong signal of this is the fact that Rudd has just
reappointed Michael L'Estrange as DFAT Secretary. L'Estrange
is from the opposition Liberal Party and was first appointed
by John Howard. If Rudd had any plans for DFAT, he would
have likely appointed one of his own people.

CLUNE